Analysis

The numbers behind the baby formula shortage

Analysis

The numbers behind the baby formula shortage


The baby formula shortage throughout the United States has made headline news and forced parents into an incredibly difficult position. New NielsenIQ data shows current baby formula on-shelf availability (OSA) rates across the country and the regions hardest hit by this shortage.  


A marked drop

According to NielsenIQ’s OSA Barometer, at the end of April 2022, the year-to-date OSA rate for baby formula across the country had dropped from 89.9% in 2021 to 85.4%. For context, the average OSA rate for all CPG products in the U.S. is 93.3% this year—highlighting the troubling reality of the baby formula shortage.  

Furthermore, it is taking an average of 5.5 days to resolve an out-of-shelf situation for baby formula this year, an increase of one additional day compared to 2021.  

To make matters worse, it appears this shortage is going to get worse before it gets better. A significant decline occurred during the week of March 5, with baby formula dropping to an 84% OSA rate. The week of April 30 set a record low—an 81.2% OSA rate, with missed sales at $11M due to product unavailability, compared to a weekly average of $4.8M in 2021. 

a chart showing on shelf availability rates for baby formula from november to april 2022

Varying impacts

While shortages of baby formula can be seen across the U.S., not all regions and states are impacted evenly. The states most impacted by the shortage include:

  • Iowa (78.4% OSA)
  • West Virginia (78.7% OSA)
  • Louisiana (79.1% OSA)
  • Kentucky (79.8% OSA)
  • Minnesota (80.2% OSA)

Regionally, those most impacted include the West North Central, East South Central, and Middle Atlantic portions of the country.

a chart showing which US regions are hardest hit by the baby formula shortage

Baby formula suppliers have obviously been highly impacted by shortages—notably Abbot Laboratories, which was forced to recall formula and shut down production at a plant—but not all retailers have been evenly affected.

As the chart shows below, there is a nearly 25% gap between those retailers with the highest OSA rates and those with the lowest.  

a chart showing the difference in baby formula shortage for the highest performing retailers and suppliers and the lowest performing

Relief on the horizon 

Unfortunately for desperate parents and retailers trying to get formula on their shelves, it appears as though the baby formula shortage may stick with us for a little longer. The FDA cleared the way recently for international formulas to be more easily sold in the U.S. but noted it could still take weeks for these products to hit shelves. 

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